Treasury ETFs rallied and yields dropped sharply Friday after the disappointing August employment report and downward revisions triggered speculation the Federal Reserve may not begin tapering its bond purchases at the policy meeting later this month.
The iShares 20+ Year Treasury Bond ETF (NYSEArca: TLT) rose more than 1% after the Labor Department said the U.S. economy added 169,000 jobs last month, lower than expected.
Also, the July and June figures were revised lower. The labor force participation rate fell to 63.2%, the lowest level since 1978, MarketWatch reports.
Yields on 10-year Treasury notes pulled back Friday after nearly touching 3% this week – they were as low as about 1.6% in early May. Treasury yields have spiked in recent months on talk the Fed will begin winding down its purchases of bonds and mortgages, sometime before the end of 2013.